Why Don’t The Rich Give More? Here’s Why…

It’s ironic, really. You’d think that millionaires and billionaires would be some of the most generous people on the planet. After all, they could literally withdraw all their money from the bank and use it to insulate the walls of their palatial mansions. They could heat their houses by lighting bales of bills on fire.

But the crazy thing is that compared to the rest of the population, the super wealthy give away a smaller proportion of their income. In Britain, the uber rich can secure a spot in the top 100 givers spot by donating a miniscule 1.08% of their income.

Transporting these numbers into the U.S., it would mean that average American could have those bragging rights by giving about $400 to charity. That’s hilarious in a heart-breaking sort of way.

One of the most surprising, and perhaps confounding, facts of charity in America is that the people who can least afford to give are the ones who donate the greatest percentage of their income. In 2011, the wealthiest Americans—those with earnings in the top 20 percent—contributed on average 1.3 percent of their income to charity. By comparison, Americans at the base of the income pyramid—those in the bottom 20 percent—donated 3.2 percent of their income. The relative generosity of lower-income Americans is accentuated by the fact that, unlike middle-class and wealthy donors, most of them cannot take advantage of the charitable tax deduction, because they do not itemize deductions on their income-tax returns.

Of course, this raises one, somewhat huge question: WHAT THE HECK IS GOING ON?

There is a level of absurdity to the whole thing. If anyone can afford to part with some cash, it’s the men and women who don’t think twice about dropping multiple millions on a yacht of Noahic proportions. So what’s the issue here? Why is it so difficult to separate the wealthy from their money?

In this post, we’re going to lay out 7 reasons why the rich don’t give more. By the end, you’ll probably go one of two directions:

Outrage

Insight into how to approach the wealthy for donations

#1 – Rich People Don’t Give More Because They Plan To Give Later

Let’s start with the best reason the rich aren’t giving more now: they have plans to give a lot later. A number of the wealthiest individuals in the world – Bill Gates, Warren Buffet, Mark Zuckerberg – have pledged to give a gargantuan amount of wealth over the course of their lifetimes.

5 Hour Energy creator (and multi-gazillionaire) Manoj Bhargava has said that he’s going to give away at least 90% of his fortune to charity. Sara Blakely, creator of Spanx, has hopped aboard The Giving Pledge, in which the rich pledge to give away 99% of their wealth.

So before you begin gnashing your teeth and foaming at the mouth, at least give credit to those individuals who have a plan to donate huge amounts.

#2 – The Rich Don’t Like Being Bothered

Now on to some of the less pleasant reasons why the wealthy tend to be tightfisted Scrooges. The simple truth is they often don’t want to be bothered. They’ve got things to do, people to see, small corporations to crush. They are empire runners, making deals, running for president, selling huge amounts of stock.

Giving away massive amounts of money can be time consuming. There are tax options to consider and causes to research. Those wealthy magnates don’t want to funnel cash to some guy with an elaborate Ponzi/pyramid scheme. Although their donations could potentially save millions of lives…it simply takes too much time.

Now, to be fair, there are serious challenges in donating large volumes of cash. It’s an understandable challenge. Not all rich people fall prey to this trap, as you’ll see below.

#3 – The Rich Feel Overwhelmed By Choices

There are an enormous amount of options when it comes to charitable donations. And let’s be honest: many of them aren’t exactly subtle when asking for donations. The hyper-wealthy are often bombarded by organizations asking them to “make a one-time donation”.

Additionally, it can be challenging finding an organization that aligns with their values. As Google’s Craig Silverstein said:

The advice I got as I embarked on giving was: Focus on something you’re passionate about. There are so many worthy causes, but none that jumped out at me; how could I choose? I was paralyzed by too many options.

Unfortunately, not everyone is as altruistic as Silverstein, who is donating 70% of his fortune to women’s education. Many of the rich are more interested in acquiring more houses, Lamborghinis, and hot tubs than in saving the world.

#4 – The Rich Don’t Want To Be Hassled

It’s amazing how many long lost relatives come out of the woodwork when you become rich. That second uncle’s brother Larry and the fifth cousin three times removed. When you make money, you become a target for money grubbers. And, as even us mortals know, it’s tough to say no to family and friends.

Psychologist Moira Summers compares sudden riches to announcing that you like steak…and having someone deliver 200 cattle to your door. She says:

That was very sweet, but what the hell do you do with 200 steer? You need to know how to deal with them and that’s very different than eating a steak.

Unfortunately, one of the side effects of this is that it can desensitize the rich to legitimate needs.

Some people, such as some of the billionaires mentioned above, are willing to endure the hassle in order to find worthwhile causes, while others simply don’t want to deal with.

#5 – Rich People Are Nervous About Going Broke

Consider the situation some of the rich find themselves in. They may have once been relatively poor, just trying to make ends meet. Thanks to their hard work and smart moves, they’ve acquired a huge amount of wealth. But in the back of their minds, they always remember what it’s like to not have money. On top of this, there are countless stories of rich people suddenly losing it all when the market crashes or a business deal goes South.

And so they’re uncomfortable with the idea of giving up their hard earned money. They’re worried about something going wrong. About everything going to pieces. About all their hard work suddenly vanishing, like that guy who sells you a lemon used car then never returns your calls. It’s a legitimate, understandable response.

Of course, there are others who don’t have that excuse, either because they’ve inherited huge sums of money or have built up so much wealth there’s no possibility of it going up in smoke.

#6 – Rich People Aren’t Exposed To Much Need

When you’re traveling in private luxury jets and staying at elite resorts, you’re not going to see much poverty or need. You won’t rub shoulders with a struggling family on the 18th hole of the golf course, and you won’t encounter developing world poverty as you sit down to a massive steak dinner.

One of the reasons the rich don’t give as much to the needy is that they don’t see the needy as much. Ken Stern wrote in The Atlantic:

Wealthy people who lived in homogeneously affluent areas—areas where more than 40 percent of households earned at least $200,000 a year—were less generous than comparably wealthy people who lived in more socioeconomically diverse surroundings. It seems that insulation from people in need may dampen the charitable impulse.

Implications For Nonprofits and Charities

The above reasons present some interesting lessons for nonprofits and charities. First, they need to be sensitive to the circumstances a wealthy person is in. Are they newly wealthy or well-established? If they’re newly wealthy, they’re probably being bombarded with requests for money and may not be open to helping.

Second, nonprofits and charities need to be aware of plans already in place. As noted, numerous rich individuals already have solid plans for donating a huge amount of their wealth. Their commitment to these plans will, at times, preclude them from donating to other causes.

Finally, the wealthy need to be sold on a cause they truly care about. When you combine their insulation from need and the overwhelming number of options available to them, it’s easy for them to tune you out. To break through, you need to put something in front of them that really matters.

Conclusion

It needs to be stated that, even though the rich may not give as much percentage wise, many still do contribute huge sums to crucial causes. Often times, their lack of giving can be tied to legitimate excuses rather than pure selfishness.

That being said, let’s hope that more wealthy individuals follow the examples of Bill Gates and Warren Buffet.

20 Comments

It is obvious that the rich do not know where to begin (too much choice) and do not have lots of time to research charities. One organisation in the UK researched an area (child abuse)looked at over 100 charities, chose 8 of the most effective and reported on them. A philanthropist who cares about children read this and began supporting our charity WAVE Trust (1 of the 8. More philanthropy advisers should adopt a similar approach to make decision making easier for busy or befuddled philanthropists. For instance choose an area every year report on it, charge for the report and hey presto – focused and effective donor giving!!!!

One thing the article overlooked about the UHNWI,s is that most of their money is in assets that make more value, not more money. It isn’t till the high ticket item is sold that money is available to give. Sometimes this can take a year or more to accomplish and comes with a host of legal and tax issues to resolve in the process. Low minded people want their governments involved in charity work. Well guess who demands to be first in line when the wealthy begin to give? The same government who is least likely to properly handle the “donations “.

And yet they have no problem finding the money to build towers to their ego like Jeddah, Saudi Arabia. and Burj Khalifa Dubai. The Sheikhs in the middle east live right next to one of the biggest starvation crisis in Yeman yet do nothing. Instead they build towers that are mostly empty. and there sons spend billions on football teams, build stadiums in the desert to host a world cup, build a F1 tracks. I could go on and on about Billions spent every year by a handful of men that claim to be good religious men yet they ignore if not exploit the poverty in their own nations and the humanitarian crisis in other muslim nations. It has nothing to do with any of these excuses it is simply greed.

There is no excuse they share the same planet and alas are human beings…how can anyone sit by with all that money and cannot help someone who needs food,hope and shelter. It makes me sad – I would say shame on them but what would be the point.

It is hard to watch sometimes but we can remember that for ever one that may not give generously there are others that are giving back. We celebrate every gift and good work that helps those less advantaged.

You don’t become rich by giving it all away. Have you ever heard of lottery winner win huge amounts but by giving it all away are now living broke. While you may not think rich people donate there are other ways the rich contribute to helping others. Such as providing jobs or building homes. Or giving personally to people they meet. Just because it isn’t noted in some charity book somewhere doesn’t mean rich people aren’t generous. I don’t consider myself rich. But I tend to give money personally to people I come across who have a real need. I don’t like charities using most of the money donated for advertising and office space or whatever. I like to give directly to those in need. And no one even realizes there is such a thing as a personal donations. So those who say rich don’t like to donate have no real idea what they are talking about. I really like the idea of the gofundme. I feel comfortable donationing to a person I feel needs it.

I agree Cindy. It is a real balance. Sometimes it is hard to watch the percentages of giving to income but you are absolutely right, the wealthy are as such because they manage the money well. Personal donations are really good as well. That is they way I prefer as well. I find Gofundme to be an unfortunately place though because they still take a percentage of the funds so all of them don’t go towards the actual project. That is why is like http://www.connectforwater.org there donations to champion projects are 100% sent to the recipient and connectforwater takes nothing from those funds. Keep up the good work you do in personally supporting people.

I am not sure we can judge whether they are going to heaven or not, but I do believe we can work with them to create and unselfish culture and an others focus culture where enable and encourage those around us and around the world.

Jeff Bezos has around 130 Billion Dollars to date. Now let’s be honest with ourselves. 130 Billion dollars is too much for one person. He can literally do whatever he wanted to. If he were to give away 50% of his 130 Billion to the poor and needy, he would be giving each and every person around 1500 dollars. (assuming that the current number of poverty is around 45 million). That’s…. a LOT of good, and relatively a lot of money that can spur the poor and raise the bottom. Lots of people would question the power of 1500 dollars, but that’s over a year and a half’s worth of food paid for. Rich conservatives wonder why the “poor can’t find jobs.” It’s because most of them can’t find jobs that are willing to pay them the amount that they NEED to survive. Trust me, current minimum wage is literal garbage, and 1500 dollars buys them 1.5 year’s worth to not worry about food…. In that time, people can look for better jobs, try to save as much as they can, etc. It buys people time. 1500 dollars amounts to a bunch of paychecks for the majority of poverty stricken people, and if people are living ‘paycheck to paycheck’, they can start saving a little at a time. Imagine how many lives he would save. People would probably call him a hero, and that’s only 50%…

That leaves him with 65 billion dollars. Yeah sure, he’s no longer the richest person in the world, but I guarantee that he would be the favorite, and people would long remember his name in the annals of American History, as an individual that saved America.

Now imagine that he met with other Money-Hungry Tycoons that are probably destined for a sad afterlife:

He then tells them to do the same. It then becomes a race to see who can save the most people. This is how the rich should view their money. Not as a race to see who can be the richest before they die.

For God’s sake, Warren Buffet lives in a two story house, and has preached this concept. People love him, and people hate (literally, wish to kill) every other billionaire.

The rich see those that ask them for money as not serious people. Rather than asking for money they prefer you ask for ideas and secret of success, they will generously give you in order to start building your own wealth. No rich man turns you down when you ask for secret of wealth creation. Unfortunately those who can not work and charity homes may fall victim of this ideology but that is the position of the rich. Every one is responsible for his own show, if its going to be, its up to you. It may sound brutal,but its the truth

I think it may be a little less complex…as one of the “poor” in the this country,I believe it’s about relatability.The poor and lower middle classes are much know likely to know what it’s like to be in the trenches. We want to protect our own, so we do. This doesn’t mean that others with more wealth don’t contribute, but on the whole, the poorest do give more. Important and interesting issue.

Dear Universe Never have we seen such pain, loss and suffering on so many levels. We that see where this is going are hurting badly and do not understand why the rich arent trying harder. Something needs to change and it needs to happen NOW! If somebody can help please Pushactivate…. If Nobody blames anybody for all the mistakes we may find Love and Hope still. May this Christmas be the very last where the world, mainly the wealthy, turns a blind eye and ignores the situation at hand. Manifest Change poor people of the world and maybe, just maybe a Miracle takes place….

Warren Buffet is a phony. He is all smoke and mirrors. He is not generous with his wealth. He says raise his taxes – he wants to pay more. Well, he can send in more money to the government on his own if he so chooses. They will not turn it down.

Does it not truly boggle one’s mind as you hear of the wealth of some. It seems there only goal in life is to accumulate more and bigger toys while being the center of attention, from the super wealthy, to the athletes, talk show hosts, movie persons, politicians and more. There is a lot of good we never hear of or little made of it. So often it seems those named are ready to get on the soapbox and never get in the trenches…..